Ch. 10: Performance Measures in Turnaround Situations.

The business world can be messy. There is no shortage of reasoning that businesses stare down a possible failing. Many times these can be seen on the horizon and steps are often put into effect to try and avert the downfall. Business plans are living documents because missteps may need to be reevaluated down the road. This blog post will discuss how businesses migrate through turnarounds and performance measures that are often the most critical during these times.

Photo by Jim Wilson on Unsplash

In addition to money, time is often the biggest constraint when contemplating a turnaround situation (ABI, 1999). While many tremors of important problematic key issues and possible failures can be seen down the road, time is of the essence. Another critical factor is having the right people to implement the business turnaround. This individual or individuals will need to have a strategic mindset, because they will have to consider the time frame, money, and be able to draw the right conclusions based on all available information (ABI, 1999). Generally, a team mindset might be best suited for such an endeavor. Most successful turnarounds have been implemented through a variety of steps. These steps typically include revising the business or organization plans, meeting with the board of directors or other key personnel, meeting with other employees to help establish relevant changes, gauge clients and vendors for potential key ideas, coordinate with banks and other tax institutions, cut unnecessary costs and keep only essential employees to the business (Adams, 2018).

Image by Mohamed Hassan @ Pixabay

As you can see it is quite the undertaking to strike a successful business turnaround. It is often necessary during these times to utilize KPIs (Key Perfomance Indicators). These performance measures can often inform a business when it is time to make changes by measuring performance in a variety of categories (Palazzolo, 2017). While we as owners and managers often feel we see and utilize the best of strategies, these KPIs can indicate areas that we may be missing. These metrics can also compare/contrast analysis between different measurements taken, such as total revenue of one month versus another and can tell us that it is time to add something to the business strategy or remove something entirely (Palazzolo, 2017).

In summary, it is important for organizations and businesses to stay aware of potential warnings of failures on the horizon, however sometimes even the most strategic and gifted managers can miss these red flags. That is why it is important to utilize KPIs as performance measures to gauge a variety of categories that may be problematic. These metrics can often observe and catch what humans may miss.

References

• ABI Institute (1999, June 01). Managing a Successful Business Turnaround. Retrieved July 20, 2020, from https://www.abi.org/abi-journal/managing-a-successful-business-turnaround
• Adams, B. (2018, August 09). 10 Steps to Turnaround a Struggling Business. Retrieved July 20, 2020, from https://businesstown.com/articles/10-steps-to-turn-around-a-struggling-small-business/
• Gulati, R., Mayo, A. J., & Nohria, N. (2016). Management: An integrated approach. Australia: Cengage Learning.
• Hassan, M. (n.d.). Retrieved July 20, 2020, from https://pixabay.com/illustrations/kpi-indicators-performance-4266500/
• Palazzolo, S. (2017, August 10). TURNAROUND MANAGEMENT: Do Your KPIs Tell You It's Time? Retrieved July 20, 2020, from https://tipofthespearventures.com/turnaround-management-kpis-tell-time/
• Wilson, J. (2019, February 11). Photo by Jim Wilson on Unsplash. Retrieved July 20, 2020, from https://unsplash.com/photos/5QvsD0AaXPk